What types of equity awards did Salesforce grant to its top executives?

Salesforce granted stock options, restricted stock units (RSUs), and performance-based restricted stock units (PSUs) to its Named Executive Officers. Stock options and RSUs generally vest over a four-year period, while PSUs have a performance component tied to the company's Total Shareholder Return (TSR).

How is the performance of the performance-based RSUs measured?

The performance-based RSUs are measured by Salesforce's Total Shareholder Return (TSR) relative to the TSR of companies within the NASDAQ-100 Index. The performance period is three years from the grant date (ending May 15, 2023). Payouts are determined by the company's TSR percentile ranking within this peer group.

What is the potential payout range for the performance-based RSUs?

The payout for performance-based RSUs can range from 0% to 200% of the target number of shares. A 100% payout is achieved if Salesforce's TSR ranks at the 60th percentile compared to the NASDAQ-100 Index group. Payouts increase for rankings above the 60th percentile and decrease for rankings below it, with no payout if the TSR ranking falls below the 30th percentile.

Are there any special conditions related to a change of control for these awards?

Yes, the performance-based RSUs have specific provisions for a change of control. If a change of control occurs, the performance metric will be based on TSR from the grant date to the change of control date, using the same 0-200% scale. A portion of shares may vest immediately, with the remainder vesting over the original Performance Period, and further accelerated vesting is possible if the executive experiences a qualifying termination within a certain timeframe around the change of control.

CRM 8-K: Leadership Changes

Summary

This 8-K filing from Salesforce, Inc. (CRM) on April 23, 2020, primarily details the equity awards approved by the Compensation Committee for its Named Executive Officers on April 22, 2020. These awards include stock options, restricted stock units (RSUs), and performance-based RSUs, all subject to standard vesting schedules and specific performance metrics. The performance-based RSUs are tied to the company's Total Shareholder Return (TSR) relative to the NASDAQ-100 Index over a three-year period, with payouts ranging from 0% to 200% of the target amount based on TSR ranking. This structure incentivizes executives to drive long-term shareholder value and aligns their compensation with the company's performance against its peers.

Key Highlights

1Approval of new equity awards for key executives, including CEO Marc Benioff, CFO Mark Hawkins, and other named executive officers.
2Awards consist of stock options, restricted stock units (RSUs), and performance-based RSUs.
3Stock options and RSUs are subject to a standard four-year vesting schedule.
4Performance-based RSUs are contingent on the company's Total Shareholder Return (TSR) ranking against the NASDAQ-100 Index over a three-year period (through May 15, 2023).
5Performance-based RSUs offer a payout range of 0% to 200% of target shares, with 100% payout at the 60th percentile TSR rank and incremental increases/decreases for higher/lower ranks.
6A floor of 100% payout for performance-based RSUs is in place if the company's absolute TSR is negative, regardless of relative ranking.
7Special vesting provisions for performance-based RSUs are included in the event of a change of control, with acceleration clauses tied to qualifying terminations.

Salesforce, Inc. 8-K Report, Executive Changes (Apr 24, 2020)

Summary

Key Highlights

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